The branchless banking increased to 10m in second half of 2017. PHOTO: FILE
KARACHI: With the addition of 10 million accounts in the second half of 2017, branch-less banking transactions in Pakistan reached Rs21 billion while the share of m-wallet in the technology-based system expanded to 71%, according to a recent report of the State Bank of Pakistan (SBP).
Branch-less banking, a system that works remotely with the help of technology, grew 87% to Rs21 billion, said the report covering data of last quarter of 2017.
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“M-wallet [mobile wallet] share has crossed 70% mark for the first time in history, ending at 71% by the end of Oct-Dec 2017 quarter,” said the report. The m-wallet share was only 13% in customer-oriented transactions in Jan-Mar 2015, but since then a significant rise in wallet-to-wallet transfers [96%], mobile top-ups [98%], utility bill payments [76%] and pension payments through m-wallets [74%] has been recorded.
People are getting familiar with the new technology that is why m-wallet usage is increasing. Out of every 100 transactions of branch-less banking, 71% customers chose m-wallet in the last quarter of 2017 while the rest of the transactions were conducted over the counter (OTC).
“Gradually [customers are] shifting their preferences to conduct self-assisted transactions instead of using the branch-less banking channel on requirement/seasonal basis via the OTC mode,” said the SBP report.
However, agents did not seem to be happy with the system as in the last quarter of 2017 the number of agents decreased 3%. “Companies have withdrawn our incentive,” said Atiq Ahmed, who runs a mobile accessories and retail payment shop in Bilal Colony of North Karachi.
“I have started offering new services after I saw people making transactions on their own,” he said. Growth in branch-less banking accounts was also encouraging in the Oct-Dec 2017 quarter. The number of accounts reached 37.3 million with 13% growth.
Branch-less banking platform became the channel for disbursement of Rs32 billion on account of social welfare payments.
The Benazir Income Support Programme (BISP) was the top contributor with 74%, followed by pension payments of the Employees Old Age Benefits Institution (EOBI) and payments for Internally Displaced Persons (IDPs) with Rs6.3 billion or 20% and Rs507 million or 2% respectively.
In the second half of last year, branch-less banking picked up pace. “It is encouraging to note that around 10 million accounts have been opened in the last two quarters of 2017,” said the report.
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On average, 1.9 million transactions were conducted per day in the quarter ended December 2017. Active agents of branch-less banking, who performed at least one transaction in the last 90 days, grew 6% from the preceding quarter, reaching 405,673.
Female customer share in branch-less banking accounts was 20% or 7.3 million while accounts held by male customers were 29.9 million. Majority of branch-less banking account-holders were from Punjab including 5.3 million female, followed by Sindh with 1.2 million female.
Published in The Express Tribune, August 8th, 2018.
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